How and Why You Should Practice Big Financial Moves — BEFORE You Need to Make Them

Kim and I have rolled into the Denver area, where we'll spend the next week hanging out with family and friends. While here, I'm also working with Mr. Money Mustache to prepare for our upcoming workshop for World Domination Summit. Yesterday afternoon, as we sat in the RV outlining our presentation, Pete and I discussed the idea of “practicing” big financial moves before those moves are actually necessary.

The average person doesn't look for a new place to live until she needs a new place to live. She doesn't practice buying a car until she needs a new car. She doesn't put in job applications until she needs a new job.

In other words, the average person is reactive. He makes big moves when life dictates that he make big moves. As a result, he loses a lot of leverage during negotiation. If you have to find a new job because your former employer just went out of business, you lose the luxury of taking your time, of being choosey.

But what if people took a proactive approach instead?

Test-Drive Different Jobs

“I like the idea of practicing the job search process,” Pete said. “Even if you have a great position, you can get a lot out of applying for other jobs.”

“I have a friend back in Portland who does just that,” I said. “He has a high-paying job that he loves, but that doesn't stop him from applying for other opportunities. He watches the want ads for promising positions. When he sees one, he submits an application. If he gets an interview, he takes time off work. He's not seriously looking to change companies. He's simply trying to stay sharp.”

At the same time, this habit allows my friend to keep up with what's happening in his field, build a network of contacts, and gain leverage for salary negotiations. When his “practice” applications yield job offers, he can choose to take the new position or use the info to ask for a raise from his current employer.

There are other ways to use the concept of “practice” to take control of your career.

For instance, you might conduct informational interviews to explore other opportunities. My friend Michael is a career counselor, and he calls the informational interview “the job-hunter's secret weapon”. Few workers ask for them. Those that do tend to jump-start there careers. (Never use an informational interview to ask for a job; use it instead to learn about other companies and careers, or to pick the brains of experts in related fields.)

Aside: I've never conducted a formal informational interview myself, but I've done something similar in a casual way. Back when I ran Get Rich Slowly, I'd sometimes get interviewed by reporters from major outlets, such as The New York Times. All my life, I'd wanted to be a reporter, so after the interviews were over, I'd make sure to ask the reporters about their jobs. I'm glad I did. Without fail, they'd tell me that I did not want to be doing what they were doing. In fact, they said, most reporters wished that they were in my shoes…

Here's another example of how certain people might test-drive different jobs:

When we paused our RV trip last autumn to spend six months in Savannah, Georgia, Kim decided she wanted to earn some money. But she also wanted to keep her schedule open in case we decided to explore the South.

Instead of applying for full-time dental hygienist positions, she scoured Savannah, dropping her résumé at as many dental offices as possible. She told employers she was looking to do part-time fill-in work. It didn't take long for people to ask her to cover for sick days and family emergencies. During our six months in Georgia, she had as much work as she wanted. (And she still gets calls from people asking her to fill in.)

When we get home to Portland next month, Kim intends to take the same approach there. She'll look for part-time fill-in work at local dental practices. Doing so will allow her to “test-drive” different offices, checking whether the situation is a good fit for her and the employer. Perhaps, if she finds the right place, she'll eventually accept a full-time permanent position.

This is a great example of the Money Boss philosophy in action. Under the traditional employment model, the employer holds most of the power. He gets to test-drive the employee. Kim has flipped this model on its head. She's the one with the power, test-driving the employer. She basically created a new job for herself: she's a substitute dental hygienist.

Practice Home Buying and Car Shopping

This concept can be applied to other aspects of your financial life. Pete and his wife used it to find their current home, for instance.

“We already owned a place here in Longmont,” he told me. “We liked it. We didn't need to move. But I kept my eye on the local housing market. What if I could find someplace better? Someplace more bike-able? When our current home came on the market, we made an offer. It didn't matter whether or not the offer was accepted because we already had a fancy place to live. We weren't under any pressure. But our offer was accepted, and now we own a better home in a better location.”

“Do you think this is something other people should do?” I asked.

“Absolutely,” he said. “I think it's a great idea. Don't wait until you have to change homes. Keep an eye out for places closer to where you work. Can you move and ditch your car? Can you downsize your home so that you don't need to own so much Stuff?”

I think this ia a smart approach. Stay satisfied with your current spot, but maybe take one Saturday afternoon every six months to practice the home-buying (or apartment hunting) experience. Browse Craigslist to see what's available. Attend open houses. Visit other neighborhoods. You'll stay informed on current market conditions and get a good feel for the types of homes available in your area.

You can do the same thing with cars. You don't have to wait for your current vehicle to give up the ghost before you start shopping around. Every once in a while, drop by a car dealership to see what's available. Take a test-drive, even if you don't plan to purchase. Even practice negotiating with the slick car salesman!

A Word of Warning

One danger with these exercises is that you could become dissatisfied with your current situation, with your current job or automobile or home. That's not the purpose of this sort of practice. Your goals are to stay informed, to develop the skills you'll need when you do have to make a big move, and — maybe — to gradually build a better life.

Have you ever done this sort of thing in the past? Have you practiced applying for other jobs, even though you're content with your current career? Do you keep up-to-date with the homes for sale (or apartments for rent) in your city? Do you browse used car lots just for fun? Are there other ways people could apply the concept of “practicing” big money moves?

In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.

I’m generally happy with my current job and company. But, I recently got an email from a recruiter at a company I’ve always been interested in. After discussing it with my husband, I’ve decided to explore the opportunity. I

s my resume up to date? Newp, the last time I updated my resume was 2008……

Before I took my first full-time job as an anesthesiologist, I worked as a locum tenens (temporary) doctor at the hospital and lived with my wife in the community for several months before deciding to make it our home.

Due to circumstances beyond our control (hospital bankruptcy), we had to move. I took my current job in a place where I had previously worked as a locum tenens doc, in a community I spent a fair amount of time in growing up.

I would love to test-drive an early retirement, but the most I can muster is about 2 weeks off at a time. That’s not a lot of time to get a good feel, but I’m pretty sure I won’t hate it.

I like this approach to life. It puts you in charge of the decisions and shows you your values. Once I was able to treat employers like my presence was a favor to them, I was able to negotiate for myself better.

I have been doing this recently, as I know I’ll need to get a new car in a year or so. I’ve spent 2 days so far car shopping, test driving and negotiating, and plan to do that a few more times before I actually buy.

Good plan! I started shopping when my car was 12 years old. I found the right fit when my car was 13. I could probably have gone to 14 or 15 but I wanted to get out before a major repair or breakdown hit. I wasn’t in a hurry, so I had plenty of time to research, crunch the numbers and wait for the right point in the sales cycle.

I really like the idea of test-driving a job before committing. I am beginning to really hate my current position and have been looking around. Unfortunately, I’ve been in this job for 28 years and nothing I know here translates to any other gig and I am not all that fond of this industry (telco). My friends all warn me how hard it is to find work in your 50s (I’m 54) so I’m staying put. For now.

If only people hired fill in former bond traders. Fill in dental hygienist sounds like an excellent way to make a quick buck. I think that ability is notably limited to smaller employers though. The big ones have way too many policies in place, bureaucracies, and other inefficient practices that would not allow for temporary employment. I imagine most of these companies would not understand the desire from the employee to work this way

You can also test drive other jobs at your current employer. Offer to fill in for someone going on vacation or on parental leave. I tried on three other roles this way and it definitely helped me see what I liked and did not like. It also helped in internal interviews that I’d learned about other parts of the business, making me a more well-rounded candidate.

Now that I’m FIRE I’m thinking about how to try out volunteer opportunities before I get sucked in to a larger commitment.

I completely agree with practicing the job search process. I wasn’t 100% decided on finding a new job but decided to put myself out there anyways for the experience. I found my current job which I love through that process. The downside, like you said, is that you can make yourself unhappy if nothing changes in your current situation. Once I put my resume out there, I had one foot out the door at my old employer and started to notice all the little things that bothered me that I had ignored before. I had to go!

1. Volunteer
In college, I was debating between a career as a librarian or an archivist (for those of you not in the field, I’m sure that sounds like potato and potato, but I assure you they’re different). I volunteered at a regional government archives and learned A LOT! Not only did I learn interesting archival skills, but I learned that being an archivist was not what I imagined and not what I wanted to do. That means I did NOT waste a masters degree (time, energy and $$$) before learning that valuable lesson.

2. Informational interview
I’ve done one informational interview (as the interviewer). I’ve done several informational interviews about my current position with students. This can be so useful. It helps you think about the career/position in ways you might not have before. You can learn how to “get there”, so to speak. You make a professional connection with the personal you interview. It’s not as in-depth or behind the scenes as volunteering, but for the time involved, it’s good ROI.

3. Practice
Story A) For years before I bought my house, I “played house” (per Suze Orman). You determine what price home you think you want to buy and approximate what the monthly payments should be (mortgage plus insurance & taxes). Every month you pay your rent and then pay into savings the difference between your current rent and your imaginary house payment. It helped me determine if I really could afford to own a home and it boosts your targeted savings (down payment). This should work for any planned increase in living expenses.

Story B) I haven’t had a car for 16 years. When I got rid of my car, I just kept postponing a deadline for buying a new [used] car because I seemed to be getting along all right without one. This is a bit much for most people. I have an acquaintance who decided she wanted to get rid of her car, but was nervous about it. So, she pretended she didn’t have a car for X amount of time do give the new lifestyle a spin, but with the safety net of still having the car. Personally, I think I’d rely on the car too much if it was available, but this worked for her.

This is a great concept. I think it goes along with visualizing the outcome of a goal. My wife and I are thinking of buying a property overseas a few years from now and we’re already taking trips to the desired location and talking to realtors so that we can see how the markets are moving in those areas. Even though this is years ahead we want to know what to expect so that we can get the desired outcome. We’re visualizing how we want to live after FIRE and are analyzing all pieces of the puzzle before we put it all together.

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My name is J.D. Roth. I started Get Rich Slowly in 2006 to document my personal journey as I dug out of debt. Then I shared while I learned to save and invest. Twelve years later, I've managed to reach early retirement! I'm here to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you get rich slowly. Read more.

General Disclaimer: Get Rich Slowly is an independent website managed by J.D. Roth, who is not a trained financial expert. His knowledge comes from the school of hard knocks. He does his best to provide accurate, useful info, but makes no guarantee that all readers will achieve the same level of success. If you have questions, consult a trained professional.

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